June 30, 2015
By Francine McKenna
Kohlberg Kravis Roberts & Co. KKR, +0.79% (click here) will pay $30 million in fines to the U.S. Securities and Exchange Commission, including a $10 million penalty, for misallocating more than $17 million in so-called “broken deal” expenses in its private equity funds. KKR is a publicly traded private equity firm that specializes in buyouts and other merger and acquisition transactions. Its executives advise and manage its main or “flagship” private equity funds along with co-investment vehicles and other accounts that invest with these funds....
...According to the SEC’s Director of Enforcement Andrew Ceresney, this is the first SEC case to charge a private equity adviser with a violation of this kind....
...In its most recent 10-Q filed on May 7, KKR disclosed the pending SEC investigation and said it had $25 million, $5 million less than this total penalty, reserved for it and all of rest of its legal contingencies. That list of lawsuits includes at least five class action lawsuits that allege breaches in fiduciary duties related to inadequate disclosures to investors, price fixing, bid rigging, and restricting the supply of private equity financing.
The SEC’s probe of KKR began with a 2013 inspection. Most private equity firms are now subject to the agency’s inspections after the Dodd-Frank law of 2010 required them to register with the regulator. Monday’s SEC press release announcing the settlement of the allegations faulted a lack of policies and procedures governing broken deal expense allocation and a weak compliance program for the lapses. Marshall S. Sprung, co-chief of the SEC Enforcement Division’s Asset Management Unit, said in the announcement that a “robust compliance program” can ensure that clients are not “disadvantaged and receive full disclosure about how fund expenses are allocated.”...
KKR stated the fines involved historic data. KKR defines historic as 2006 to 2011.
March 6, 2015
By Chris Witkowsky
...The SEC’s probe of KKR (click here) began with a 2013 exam that looked at the years 2009 to 2011, according to a Jan. 21 article from the Wall Street Journal. The exams are part of the new regulatory regime to which most private equity firms are subject after being forced to register with the SEC by the Dodd-Frank Financial Reform act.
According to KKR’s annual report, the SEC is now examining prior years going back to 2006....
"Examination Priorities for 2015" issued by OCIE otherwise known as Office of Compliance, Examinations and Examinations (click here)
By Francine McKenna
Kohlberg Kravis Roberts & Co. KKR, +0.79% (click here) will pay $30 million in fines to the U.S. Securities and Exchange Commission, including a $10 million penalty, for misallocating more than $17 million in so-called “broken deal” expenses in its private equity funds. KKR is a publicly traded private equity firm that specializes in buyouts and other merger and acquisition transactions. Its executives advise and manage its main or “flagship” private equity funds along with co-investment vehicles and other accounts that invest with these funds....
...According to the SEC’s Director of Enforcement Andrew Ceresney, this is the first SEC case to charge a private equity adviser with a violation of this kind....
...In its most recent 10-Q filed on May 7, KKR disclosed the pending SEC investigation and said it had $25 million, $5 million less than this total penalty, reserved for it and all of rest of its legal contingencies. That list of lawsuits includes at least five class action lawsuits that allege breaches in fiduciary duties related to inadequate disclosures to investors, price fixing, bid rigging, and restricting the supply of private equity financing.
The SEC’s probe of KKR began with a 2013 inspection. Most private equity firms are now subject to the agency’s inspections after the Dodd-Frank law of 2010 required them to register with the regulator. Monday’s SEC press release announcing the settlement of the allegations faulted a lack of policies and procedures governing broken deal expense allocation and a weak compliance program for the lapses. Marshall S. Sprung, co-chief of the SEC Enforcement Division’s Asset Management Unit, said in the announcement that a “robust compliance program” can ensure that clients are not “disadvantaged and receive full disclosure about how fund expenses are allocated.”...
KKR stated the fines involved historic data. KKR defines historic as 2006 to 2011.
March 6, 2015
By Chris Witkowsky
...The SEC’s probe of KKR (click here) began with a 2013 exam that looked at the years 2009 to 2011, according to a Jan. 21 article from the Wall Street Journal. The exams are part of the new regulatory regime to which most private equity firms are subject after being forced to register with the SEC by the Dodd-Frank Financial Reform act.
According to KKR’s annual report, the SEC is now examining prior years going back to 2006....
"Examination Priorities for 2015" issued by OCIE otherwise known as Office of Compliance, Examinations and Examinations (click here)
